Wall Street stocks rebounded on Thursday as blowout Microsoft results and moderating oil prices blunted worries about higher US Treasury yields.

Microsoft jumped more than 15 percent, boosting its stock market value by US$450 billion - the greatest-ever single-day increase for a company on Wall Street.

That helped lift all three major US indices, led by the Nasdaq, which piled on 2.8 percent.

"A good deal of enthusiasm for Microsoft and tech is helping the tape," said Art Hogan of B Riley Wealth Management.

Analysts pointed to a pull-back in oil prices as supportive of equities as traders greeted comments from Pakistan insisting that negotiations between Iran and the United States were ongoing despite escalating strikes on both sides.

The Microsoft results came at the end of a difficult July for tech companies after Nasdaq's huge second-quarter gains.

Major tech companies in the US have been spending billions to build out AI infrastructure and develop increasingly more advanced AI models.

This week's earnings results have been seen as an important barometer on whether soaring tech valuations are justified.

Facebook parent Meta fell eight percent on Thursday on worries over the company's lofty artificial intelligence outlays. But the Microsoft earnings provided some reassurance on that question, analysts said.

"Traders are still differentiating between companies," said FHN Financial's Chris Low. "It's a healthy sign because it means it's not just a pure momentum trade."

Major US indices had lost more than 1.5 percent on Wednesday as markets panned a press conference by new Federal Reserve Chair Kevin Warsh, pointing to a mismatch between rhetoric pledging price stability and the central bank's decision not to hike rates.

US Treasury yields remained high on Thursday, but futures markets showed rising confidence that the Fed will hike rates later this year.

Hogan, noting that there were three dissents to Wednesday's Fed decision, called the outcome a "hawkish pause," adding that the Fed is "building momentum for raising rates."

Elsewhere, the Bank of England kept its benchmark rate unchanged on Thursday as expected, although the central bank warned that UK inflation was set to rise again as the US-Iran war keeps energy prices elevated.

The London stock market, not far off reaching a record 11,000 points thanks to an absence of technology firms, slipped into the red shortly before the closing bell.

The tech-heavy Nasdaq rose 2.8 percent, to 25,122, the S&P 500 rose 1.7 percent, to 7,437, while the Dow rose 1.2 percent, to 52,208. (AFP)



Edited by Cecil Wong